Three E’s on the Road to Demand Data Dominance
The three E’s are a simple roadmap for how to use demand data to gain dominance in your market. Companies that will thrive in a world where demand data changes hands in real time will be those who will use that data to embrace, empower and extend their markets. Given that those verbs are a little esoteric, let’s use Wal-Mart as an example. The first E is embracing the supply chain, which Wal-Mart has done extremely well. Wal-Mart has a consumer data gathering system called Retail Link, which offers up to the hour sales information to its suppliers. There were already data content providers established and used by big suppliers, but when Retail Link was introduced, it was an exclusive and much faster way for suppliers to know exactly what was happening with their products on Wal-Mart’s shelves. Rather than see their suppliers as players to be disaggregated and marginalized in an effort to control more profit, Wal-Mart embraced them as a virtual extension of their own business and offered consumer data that suppliers could use to grow their business within Wal-Mart. This feeds into the second E.
The second E is empowering the supply chain. The information Retail Link provided would allow Wal-Mart’s suppliers to make adept changes when necessary to sell better. Suppliers have a better understanding how their products perform, and can be ready to make changes to perform better. It helps suppliers move more of their products and Wal-Mart’s cash registers to keep gathering money and data at a furious pace.
This symbiotic relationship is the nature of the third E: extend. The whole point of Wal-Mart’s empowering of their supply chain with massive amounts of demand data is so that the product sales of the supplier can be extended. Wal-Mart’s offer to producers: use our data management system to figure out the most efficient way to sell your product, cut your costs on the production and distribution end, cut your prices to us, we will cut costs to customers, and thereby we will aggregate an even greater number of customers to buy even more of your product.
Wal-Mart is a fairly nuanced example, but it isn’t difficult to see the path on which the three E’s can take any company. Gathering demand data early and in real time is important, but companies will have to use that data wisely after the gathering. Embracing the supply chain, empowering your business partners and extending the profitability of all parties involved is a proven way to grow business, and actionable insights on demand data is the resource to make it happen.
Learn more about Author Ron Bienvenu’s discussion on the Four E’s and The Fourth Shock.
